What will my money market earn?
Enter your opening deposit, what you add each month, and the account’s APY or the fund’s 7-day yield. See the balance and the interest.
- Balance at the end
- $25,402.33
At 4% a year, $10,000.00 plus $200.00 a month grows to $25,402.33 in 5 years.
- Money put in
- $22,000.00
- Interest earned
- $3,402.33
- Interest in the first year
- $443.69
- APY used
- 4%
- Monthly rate
- 0.327374%
- Months
- 60
Balance at the end: $25,402.33. At 4% a year, $10,000.00 plus $200.00 a month grows to $25,402.33 in 5 years.
How much of it is interest?
How does the balance grow?
What does each year look like?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the balance and interest of a money market account or fund from its APY or 7-day yield, with an optional monthly deposit, year by year.
Example with the default inputs (Opening deposit $10,000.00, Added each month $200.00, Yield 4%, The yield is APY (account), Years 5): At 4% a year, $10,000.00 plus $200.00 a month grows to $25,402.33 in 5 years.
Method: Each month, interest = balance × ((1 + APY)^(1/12) − 1), then the deposit is added. A 7-day yield Y becomes APY = (1 + Y × 7 ÷ 365)^(365 ÷ 7) − 1.
- The yield stays the same for the whole time; money market rates change often, so use this as an estimate.
- Deposits are added at the end of each month.
- Fees, taxes and withdrawal limits are not included.
Worked examples
Each example is checked against the calculator on every build.
- Opening deposit $10,000.00, Yield 4%, The yield is APY (account), Years 5 gives Balance at the end $12,166.53, Interest earned $2,166.53, Interest in the first year $400.00.Source: APY is the yearly growth with compounding (CFPB Regulation DD, Truth in Savings, 12 CFR 1030 Appendix A, https://www.consumerfinance.gov/rules-policy/regulations/1030/a/)
- Opening deposit $0.00, Added each month $500.00, Yield 4.5%, The yield is APY (account), Years 3 gives Money put in $18,000.00, Balance at the end $19,207.27, Interest earned $1,207.27.Source: Future value of monthly deposits at the monthly rate (1 + APY)^(1/12) − 1 (Microsoft Excel FV function, https://support.microsoft.com/en-us/office/fv-function-2eef9f44-a084-4c61-bdd8-4fe4bb1b71b3)
- Opening deposit $50,000.00, Yield 5%, The yield is 7-day yield (fund), Years 1 gives APY used 5.124591%, Balance at the end $52,562.30.Source: SEC Form N-1A, Item 26(a): yield = 7-day base period return × 365/7, effective yield = (base period return + 1)^(365/7) − 1 (https://www.sec.gov/files/form-n-1a.pdf)
How the money market balance is worked out
The yield. Type an APY, or a fund's 7-day yield Y (percent). A 7-day yield becomes an effective yearly yield by SEC Form N-1A, Item 26(a): the 7-day base period return is Y × 7 ÷ 365 (as a decimal), and
APY = (1 + Y × 7 ÷ 365)^(365 ÷ 7) − 1
Monthly rate. The balance grows each month by (1 + APY)^(1/12) − 1, so without deposits it grows by exactly the APY every 12 months.
Month by month, for 12 × years months:
- Interest = balance × monthly rate.
- New balance = balance + interest + the monthly deposit (added at the end of the month; an empty deposit counts as $0).
Results.
- Balance at the end after the last month.
- Money put in = opening deposit + monthly deposit × 12 × years.
- Interest earned = balance − money put in.
- Interest in the first year = the interest of months 1 to 12.
- APY used and the monthly rate, as above.
Limits. Opening deposit from $0 to $1 billion; monthly deposit from $0 to $100 million; yield from 0% to 50%; 1 to 50 years.
Display. Money to the cent, rounded half up from the value worked out (nothing is rounded between months); the APY to 4 decimals, the monthly rate to 6.
Assumptions
- The yield stays the same for the whole time.
- Deposits are added at the end of each month.
- Fees, taxes, withdrawal limits and minimum-balance rules are not included.
Worked examples by hand
$10,000 at a 4% APY for 5 years. Monthly rate = 1.04^(1/12) − 1 = 0.3273740%. Balance = 10,000 × 1.04^5 = $12,166.53, so the interest is $2,166.53. The first year earns 10,000 × 0.04 = $400.
$500 a month at a 4.5% APY for 3 years. Monthly rate i = 1.045^(1/12) − 1 = 0.3674809%. Balance = 500 × ((1 + i)^36 − 1) ÷ i = $19,207.27. Money put in = 36 × 500 = $18,000, so the interest is $1,207.27.
A fund with a 5.00% 7-day yield, $50,000 for a year. Base period return = 0.05 × 7 ÷ 365 = 0.000958904. APY = 1.000958904^(365/7) − 1 = 5.1246%. Balance after a year = 50,000 × 1.051246 = $52,562.30.
Other questions people ask
How does a money market account earn interest?
A money market account pays interest on your balance, usually compounded daily or monthly, and quotes the result as an APY (annual percentage yield). The APY already includes compounding: a 4% APY grows $10,000 to $10,400 in a year, whatever the compounding. The calculator spreads it over the months at (1 + APY)^(1/12) − 1 each month.
What is a 7-day yield?
Money market funds quote a 7-day yield: the fund’s income over the last 7 days, net of fees, times 365 ÷ 7. By the SEC’s rule the effective yield, with compounding, is (1 + 7-day yield × 7 ÷ 365)^(365 ÷ 7) − 1. A 5.00% 7-day yield is an effective 5.1246% a year. Choose “7-day yield (fund)” and the calculator converts it.
What is the difference between a money market account and a money market fund?
A money market account is a bank or credit union deposit account, covered by FDIC or NCUA insurance up to the limits. A money market fund is a mutual fund that buys short-term debt; it is not insured and its yield changes daily, though it aims to keep a stable $1 share price. The maths here works for either: only the yield differs.
Do money market rates change?
Yes, often: they follow short-term interest rates. The calculator keeps the yield you type for the whole time, so the result is an estimate. It never looks up a rate: type the one your bank or fund quotes today.
How much will $10,000 earn in a money market account?
At a 4% APY, $10,000 earns $400 in the first year and grows to $12,166.53 in 5 years with no deposits. Adding $200 a month raises the balance further; type your own numbers.
Is money market interest taxed?
In the U.S. the interest is usually taxable income in the year it is paid, like savings interest. This calculator does not take tax out.